O-Burma Care

Barack Obama’s planned trip to Myanmar this month risks rewarding the country’s rulers for a job half-done. The visit would justifiably herald recent reforms and cultivate a key ally as US foreign policy pivots to Asia. But it is sure to antagonise China’s new leaders and could reduce pressure on Myanmar to make the tougher changes it still needs.

Though Obama will be the first serving US president to visit, he may find the red carpet slightly worn. Since Secretary of State Hillary Clinton visited a year ago, British Prime Minister David Cameron, South Korea President Lee Myung-bak and Indian Prime Minister Manmohan Singh have all made the trek.

Still, the trip is fitting of historic change: to end 50 years of isolation, Myanmar has freed Nobel laureate Aung San Suu Kyi along with hundreds of political prisoners, lifted media censorship and held democratic elections.

The country’s economic reforms are equally profound. It ditched a fixed exchange rate in April and has just passed a new investment law tailored to foreign investors. The rules allow 100 percent-owned foreign ventures with no minimum capital in all but a few sensitive industries, according to law firm VDB Loi. But Myanmar’s toughest reforms lie ahead. It has no independent judiciary; its military is guaranteed a quarter of parliamentary seats and its border areas are torn by ethnic strife. It needs effective land reform to stop property grabs and promote agricultural exports that don’t create Philippine-style rural peonage.

Obama may agree with President Thein Sein that Myanmar’s reform path is irreversible and feel pressure to leapfrog nations like Japan, which have already rushed in. Washington is also clearly eager to add Myanmar to its growing constellation of Asian allies.

But China’s new leaders won’t like such a high-profile visit to a country they view as their back door to Africa and the Gulf. So the U.S. needs to be certain who is in charge. Myanmar’s reforms were undertaken despite Western sanctions – not because of them – in part to escape China’s domination. Though US restrictions remain on the books, Obama has suspended them. Endorsing Myanmar at this stage leaves him with mostly sticks, but few remaining carrots.